Many small businesses that received federal pandemic aid are now on the hook for repayments, and some say the timing couldn’t be worse, the Wall Street Journal reported. WrightIMC, based in Allen, Texas, borrowed $150,000 from the Small Business Administration’s Covid-disaster loan program two years ago. The 20-person digital marketing agency made its first $1,600 loan payment this month, just as ad sales are softening. The disaster loan “has certainly helped us to survive and avoid layoffs,” said owner Tony Wright, who has frozen hiring and is cutting expenses as customers tighten their belts. “Ironically the payback is coming at a time when we are seeing a steeper decline in business than during the pandemic,” he said. “Maybe this isn’t the best time to have everyone start paying back.” The SBA issued roughly $390 billion in COVID-19 disaster loans to nearly four million small businesses and nonprofits. Unlike forgivable loans issued through the federal Paycheck Protection Program, the disaster loans were designed to be repaid. Now after several deferrals, the bills are coming due. For 1.2 million COVID-19 disaster loans, the first payments are due this month; another one million loans enter repayment in January. Borrowers began repaying 427,000 loans in October or November.
